As a country Namibia is recognised for its diverse climate, gorgeous scenery, and distinctive fauna. However, weather patterns in the country can be unexpected, and seasons have a big impact on the country’s short-term insurance sector.
The rainy season, which lasts from November to April, and the dry season, which lasts from May to October, are the two main seasons of Namibia.
The rainy season is characterised by significant rainfall and, in some cases, flooding, whereas the dry season is characterised by high temperatures and little rainfall.
In Namibia, seasonal fluctuations can have a substantial impact on short-term insurance spending. Flooding and water damage to homes and businesses are more likely during the rainy season, which may lead to an increase in insurance claims. The dry season, on the other hand, is connected with a higher chance of fire damage, which can lead to a rise in insurance claims as well.
However, there is a more serious concern affecting insurance spending in Namibia: drought. Droughts are common in Namibia, which is one of the world’s driest countries. These droughts have an influence not just on the agricultural industry but also on the short-term insurance market.
Many people may regard insurance as a luxury rather than a need during a drought. This is due to the fact that many Namibians are obliged to prioritise spending on basic necessities such as food, water, and shelter, leaving little room for insurance premiums.
As a result, insurance companies may witness a drop in their customer base as customers choose to forego insurance coverage to save money.
However, it is critical to recognise that insurance is a necessity, not a luxury. Droughts can cause considerable damage to property and businesses, and insurance can protect you from these losses.
Furthermore, insurance can bring peace of mind during difficult times by assisting individuals and businesses in mitigating the financial risks associated with unforeseen catastrophes.
To address the issue of drought and its influence on insurance spending, Namibian insurance companies must be proactive. This might include providing more affordable insurance choices to individuals and businesses who are experiencing financial hardship as a result of the drought. Insurance companies can also collaborate with the government and other stakeholders to create policies and programmes that encourage individuals and businesses to prioritise insurance coverage.
Finally, seasonal variations in Namibia can have a considerable impact on the short-term insurance sector.
The most serious issue, though, is drought, which can lead to individuals viewing insurance as a luxury rather than a need. To address this issue, insurance companies must be proactive and collaborate with stakeholders to design policies and programmes that encourage individuals and businesses to prioritise insurance coverage, even during times of financial stress.
*Johannes Hesekiel is General Manager for Personal Lines, Old Mutual Short-Term Insurance at Old Mutual Namibia
